In May, at TechCrunch’s Disrupt event in New York, researchers from Harvard Business Review were in the audience, and they were taking notes. Using their findings, along with the help of a linguistic software program that scanned video transcriptions of Q&A sessions between onstage venture capitalists and startup founders, they came to an interesting — and disturbing — conclusion.
They discovered the investors (and 40 percent of them were women) tended to ask men questions about the potential for gains at their startups, while they asked women about the potential for losses.
That wasn’t a surprise to longtime venture capitalist Aileen Lee, who spent nearly 13 years with Kleiner, Perkins, Caufield & Byers before leaving in 2012 to start her own seed-stage venture firm, Cowboy Ventures. Lee has funded male founders (August, Dollar Shave Club, Philz Coffee), as well as women founders (Textio, Brit & Co., Accompany); she has also sat around many tables with her mostly male VC peers as they’ve discussed where best to steer startups as they’ve sought follow-on funding.
At Y Combinator’s fourth Female Founders Conference in San Francisco last week, Lee talked about that HBR study and the bias she sees every day. She also shared very specific advice to female founders who are looking to raise capital (along with one observation for male-heavy venture firms).
Among her suggestions for women founders:
1) Be a good storyteller, and don’t fret if storytelling doesn’t come naturally to you. “If you are not a great storyteller, you can become one. It’s just a matter of feedback and practice.”
2) Each story has basic but important elements. Make sure you include these, beginning with:
a) what the mission and vision is of your company, to
b) how big the market is that you are chasing, to
c) the problem that you are trying to solve, to
d) who is on your team and why they are relevant, to
e) the product that you’ve built (“or what the wireframes look like,” Lee said), to
f) what kind of traction or feedback you’ve received from the market, to
g) what your economic model looks like, to
h) what you are going to do with the money you are raising.
3) Remember that your narrative should also include your personal story and why you’re the best person to be starting your company right now.
4) Be confident, but don’t stretch. “If you’re a little too arrogant or you puff things up a little too much, [male investors] will ding you for being an exaggerator.”
5) Don’t be “too shy.” The advice may make you cringe, but women have to walk a fine line here, she noted. “Guys,” noted Lee, “can get away with [being shy]. It’s like, ‘Oh, he’s just an introvert.’ ” Unfairly, women who are too quiet may face a bigger upward battle, she suggested.
6) Know your numbers. Frustratingly, women have to work twice as hard to convince men that they are quantitative, she noted, adding that “if someone asks you, ‘What’s the CAC, what’s the LTV, what are the margins, what’s the revenue plan for next year,’ just know it. Practice it.”
7) Be good at follow-up. As Lee told the audience, “If someone asks you questions [during a pitch meeting], take notes, and send a follow-up the next day saying, ‘These are the things that we discussed; I wanted to follow up on these points.’ Show that you’re super-conscientious, and you’re on it.”
8) Get networked, especially with other female founders and female investors.
Lee was addressing a largely female audience at the conference, and she centered her talk on ways for women founders to get ahead in tech, despite the micro-aggressions that many face every day. (Said Lee of the growing number of reports of women founders who’ve been mistreated by male VCs, “I”m pretty pissed off.”)
She also talked about constructive solutions to the problem, and one of these should alarm more traditional venture firms whose general partners remain all or nearly exclusively male.
Sharing that she’d had breakfast last week with women partners at other firms, Lee said that the group had discussed how to help bring more women into the general partner ranks. She also said that these VCs, along with her own firm, have more actively begun steering their most promising companies to “modern venture firms that have women and people of color in investing positions.”
Partly, she admitted, it’s these investors’ personal preference to do so. But she added that most of Cowboy’s portfolio CEOs feel the same way, that, “if they have the choice, they would rather work for a modern firm.”
The thinking is simple, Lee suggested. “Why should we make money for assholes?” she asked.